Measuring%20U.S.%20Innovative%20Activities

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Measuring U.S. Innovative Activities

• 2008 World Congress on NAEP Measures for Nations
• Washington, DC
• May 16, 2008
• B.K. Atrostic, Senior Economist
• Center for Economic Studies, U.S. Census Bureau

Barbara.Kathryn.Atrostic_at_census.gov
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Disclaimer

• The views expressed in this presentation are
  those of the author and not necessarily those of
  the U.S. Census Bureau.

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Overview

• Importance of Measuring Innovative Activity
• Allocating Scarce Statistical Resources
• Definitions
• U.S. Data Lessons Learned
• Other Countries Data Lessons Learned
• Critical U.S. Data Gaps Identifying and Filling
• Innovative Activities and Intangibles

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Why Measure Innovative Activity?

• Identify sources of new goods and services
• Identify sources of total factor productivity,
  growth, other economic outcomes

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Measuring Innovative Activity and Its Impact

• Innovation surveys
• European countries, Canada, Australia, many other
  countries
• Georgia, for the U.S.
• Fill key gaps in core microdata needed to analyze
  economic performance

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Scarce Statistical System Resources

• Focus on U.S. Census Bureau Data Collections
• Dollars
• Expertise / core competencies
• Respondent burden / cooperation

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Filling Gaps in Core Data

• Longitudinal data are critical
• Without longitudinal data, it is hard to
  rule out the possibility that a measure of
  innovative activity merely proxies for something
  omitted from or measured poorly in the core data.
• Similar issues in developing new measures of
  effects of information technology on economic
  performance
• Neither innovation survey nor more systematic
  data on innovative activity would fill core data
  gaps

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Innovation Definitions

• OECD Oslo Innovation Manual
• Guidelines for Collecting and Interpreting
  Innovation Data
• 1992 / 1997 / 2005 editions
• 163 pages in 2005 edition
• Advisory Committee on Measuring Innovation in the
  21st Century Economy
• Established by U.S. Secretary of Commerce in 2006
• Related but different idea Research and
  Development (RD)
• OECD Frascati RD manual 1963 / 1993 / 2002

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Innovation Definitions

• Oslo Manual
• The implementation of a new or significantly
  improved product (good or service), or process, a
  new marketing method, or a new organizational
  method in business practices, workplace
  organization, or external relations (2005
  version, p. 46).
• Advisory Committee on Measuring Innovation in the
  21st Century Economy
• The design, invention, development and/or
  implementation of new or altered products,
  services, processes, systems, organizational
  structures, or business models for the purpose of
  creating new value for customers and financial
  returns for the firm (January 2008, p. I).

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Innovative Activity Defined

• Related to but distinct from RD and innovation
• Specific identifiable activity
• Uses products of innovation process from own or
  other industries or sectors
• Provides environment conducive to innovation,
• Serves as marker of innovative managerial or
  organizational capacity

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Innovative Activity Data and Research Findings
U.S. Census Bureau Data

• Research Conducted at Center for Economic Studies
  or Census Bureau Research Data Centers
• Diffusion of Innovation
• Human and Organizational Capital
• Other Topics
• Findings summarized in Atrostic 2007 and 2008

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Innovative Activity Data and Research Findings
Other Countries

• Community Innovation Survey (CIS)
• Research Findings

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U.S. Census Bureau Data Diffusion of Innovation

• Survey of Manufacturing Technologies 1988 and
  1993 ASM supplements
• Computer Network Use Survey (CNUS) 1999 ASM
  supplement
• Information and Communications Technology Survey
  (ICTS) 2003 Annual Capital Expenditure Survey
  (ACES) Supplements

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U.S. Census Bureau Data Human and
Organizational Capital

• Broader capital measures would include richer
  measures of a firms human and organizational
  capital (Corrado et al. 2005, 2006)
• National Employer Surveys (NES) 1994, 1996,
  1997, 1998, 2000
• Entrepreneurship
• Integrated Longitudinal Business Database (ILBD),
  
• Characteristics of Business Owners Survey (CBO)
• Firm Organization

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U.S. Census Bureau Data Other Topics

• Dynamics of Labor Markets
• Worker and Firm Characteristics Longitudinal
  Employer-Household Dynamics (LEHD)
• International Trade
• Importing, Exporting, Outsourcing
• Foreign Direct Investment
• Successful BEA/NSF/Census Bureau pilot project
• Matched BEA FDI and U.S. Direct Investment Abroad
  with NSF/Census Survey of Industrial Research and
  Development (SIRD)
• Subsequent extension and expansion of pilot

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Innovation Measurement in Other Countries

• Community Innovation Survey (CIS)
• Eurostat sponsored (required of EU countries)
• 1992, 1996, 2001, 2003, 2005, 2008
• Based on Oslo manual
• CIS 3 4 harmonized core questions
• European Innovation Scorecard publication
• Similar surveys in many non-EU countries
• Lively microdata research

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Innovation Measurement Canada

• Since 1993
• Also survey advanced technologies and practices,
  not consistent over time
• Based on Oslo manual
• Decade of research links innovation measures with
  economic inputs, outcomes
• http//www.statcan.ca/english/freepub/11-623-XIE/2
  003001/innov.htm
• Innovation Analysis Bulletin publication

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Innovation Measurement in Other Countries

• Australia
• Innovation surveys 1992-1993, 1996-1997,
  2003-2004, 2005
• 2003-2004 not based on CIS
• Integrated Business Characteristics Strategy
• Core IT and innovation questions annually
• Detailed IT or innovation questions alternate
  years
• Links to longitudinal business database
• IT use and Innovation, 2005-2006, released 2007
• Selected characteristics of businesses,
  2005-2006, released 2008.

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Innovation Measurement in Georgia

• Georgia Manufacturing Survey
• Georgia Techs Enterprise Innovation Institute
• Georgia Tech School of Public Policy
• 1994, 1996, 1999, 2002, 2005, 2008
• Many questions designed and worded to parallel
  CIS
• Concurrent Workshop May 12 13, 2008
• International microdata Selected CIS countries
• Parallel studies, collaborative research

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International Lessons Learned Analytical Findings

• Hall and Mairesse 2006 Economics of Innovation
  and New Technology
• Jaumotte and Pain 2005
• Parvan 2007
• OECD NESTI / WPIA innovation microdata project
• Internationally comparable econometric analyses
• Workshops 2007 2008
• Related internationally comparable microdata work
• UK-led ICT impact analyses

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International Lessons Learned Not Just Innovation

• Canada Dourfour, Nakamura, Tang 2006
• Advanced technology and business practices
• Significant interactions
• UK Bloom, Sadum, Van Reenen 2006
• IT, international trade, ownership (UK vs. not)
• Significant interactions
• Germany Netherlands Hempell, van Leeuwen, van
  der Wiel 2006
• Innovation significant in MFP
• Significant interactions with IT

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International Lessons Learned Best Practice

• Current State of Art Not Settled
• Australias indicators and structures
• EU-like CIS Empirical and econometric
  properties of innovation data being tested
• Can CIS be applied straightforwardly to U.S.?

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Methodological Issues in Implementing Best
Practices

• Committee on National Statistics 2005
• Innovation, linked activities, and outcomes can
  be measured
• Many lessons still to be learned
• Applicability
• Differences in structure and sizes of firms
• Best reporting unit
• Best respondent in reporting unit
• Response Rates
• Resources

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Critical U.S. Data Gaps

• Neither an innovation survey nor more systematic
  data on innovative activity would fill core data
  gaps
• Innovative activities of interest as potential
  drivers of economic outcomes of interest, such as
  total factor productivity

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Critical U.S. Data Gaps

• Do not cover all of services
• No annual product data for retail wholesale
  trade, or services
• Data not designed to be linked
• May not be collected as panel
• Links may not work as well as expected
• Small business performance
• Need to improve measures, e.g., current SBO vs.
  1987 1992 CBO
• Data on inputs sparse
• Not comparable across sectors

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Filling Critical Gaps New Data

• FY2008 Budget initiative quarterly and annual
  coverage of all service sectors
• Off shoring outsourcing indicators 2007
  Economic Census
• Corporate structure
• 2007 SBO add franchising, more characteristics
  of business, business owner
• Report of Organization Survey asks imported
  services in 2007

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Filling Critical Gaps New Data

• RD
• NSF-sponsored addition of questions for selected
  industries, 2007 Economic Census
• Survey of Industrial Research and Development
  (SIRD) being redesigned with some of these issues
  in mind

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Filling Critical Gaps Leveraging Existing Data

• More links among micro data sets
• U.S. Patent Data RD survey-- NSF-sponsored
  linkage project underway
• FDI / DIA RD survey -- successful 2005 NSF /
  BEA / Census pilot
• Expand existing data linkages
• Extend MA database past 1992 -- underway
• LEHD-based analyses to come
• Link with additional external data
• Detailed IT investments underway
• Financial characteristics foreign operations of
  U.S. firms
• RD tax credit data being linked
• Other administrative data sources -- potential

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For the Future Thinking about Measuring
Innovative Activities

• Once core gaps are filled
• Begin where we are e.g. Advisory Committees
  recommendations
• Expand NSFs RD survey to include broader range
  of innovation investment activities
• Improve understanding of establishment-firm
  relationship
• NIPAs as organizing principle, reinforcing
  macro-micro linkages

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For the Future Thinking about Measuring
Innovative Activities

• Draw on lessons learned
• e.g. collecting data on technology,
  organizational and management structure whats
  hard, easy
• How often?
• Surveys vs. censuses
• Plan for longitudinal data
• Plan at least 2 rounds
• Need 2, preferably 3, rounds of data to test
  causality
• Design-in linkages with core data

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For the Future Thinking about Measuring
Innovative Activities

• Plan for change
• 1880 Census added Transportation and
  Communication
• steam railroads
• steamboat companies
• incorporated express companies
• telegraph companies
• 1999 Information Technology
• 2002 Supply Chains
• 2005 FDI / DIA
• 2009?
• 2019?

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Conclusion

• Understanding role of innovative activity
  requires
• Solid data on core measures of economy
• Data on innovative activity
• Longitudinal measures of both
• Filling these gaps would improve our ability to
  understand
• Entire economy
• Economic performance TFP, other measures

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Appendix The Census Bureau Research Data Center
Program

• Purpose
• Research Data Centers (RDCs) offer qualified
  researchers restricted access to confidential
  economic and demographic data collected by the
  Census Bureau in its surveys and censuses. RDCs
  are established through partnerships with
  academic and similar organizations.

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RDC Locations

• Ann Arbor MI
• Berkeley CA
• Boston MA
• Chicago IL
• Ithaca NY
• New York NY
• Los Angeles CA
• Research Triangle NC
• Upper Marlboro MD

• RDCs are Census Bureau facilities staffed by a
  Census Bureau employee and meet all physical and
  computer security requirements for restricted
  access

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Datasets Available at RDCs

• Most Economic Censuses and Surveys
• Selected Demographic Surveys and Decennial
  Censuses
• Special Files crated for research purposes
• Longitudinal Research Database, Integrated
  Longitudinal Business Database, linked files
  (e.g., LEHD), etc.

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RDCs Title 13 and Title 26

• Our legal authority to provide access to these
  data require that there be a legitimate Title 13,
  Chapter 5 purpose to any research.
• Our legal authority to provide access to IRS
  (Title 26) data in our custody requires that the
  Title 13 benefit be the predominant purpose.

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RDCs Review and Approval Process

• 1. Researcher interacts with an RDC
  Administrator to gather information about the
  data available and the procedures to be followed.
• 2. Proposals are submitted for review by Census
  Bureau staff and are either approved or denied.
  If denied, they can be resubmitted if they are
  revised to address noted deficiencies.

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RDCs Review and Approval Process, continued

• 3. If approved by the Census Bureau, the
  proposal must also be approved by the agency
  owning the data (e.g., IRS or the survey
  sponsor).
• More information
• www.ces.census.gov.